My husband and I got married in late 2017, so 2018 was the first full year of marriage for taxes. After we got married we thought we were doing the right thing by changing our marital status with HR from single to married. What we did not realize (and should have) is this would mean that our taxes were then being withheld at a much lower rate, basically assuming that we each were the whole income earner. Cut to last week when we filed we found out we owe $7000 in taxes, and a penalty for not withholding enough throughout the year.
Turns out if you are a dual income household you will need to AT MINIMUM select “married but withhold at single rate” with your hr department. But turns out that even that might not cover enough (if you are like us and each spouse has multiple sources of income even doing that won’t withhold enough, since each job assumes it’s your only source of income), so you might also need to elect to have additional money withheld each paycheck.
My dad is an accountant and we still made this mistake! Figured if I was blindsided by this other people almost certainly would be as well.
Submitted March 13, 2019 at 12:08PM by Schmootato https://ift.tt/2O3PmH5
